Market meltdown in Europe

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Market meltdown in Europe

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I would describe the mood in London today as shock.  With banking stocks down dramatically nobody seems to know what to expect.  The Icelandic bank system is teetering, and there is a race to financial impossibility with European banks competing with each other to guarantee deposits. 

It seems that the initial fear in the market had to do with creditor nations (the US and UK) but recently people are coming to terms with the fact that those who lend those countries money (European and Asian countries) may not get their money back. 

This is causing severe pressure on the European system.   One of the problems with the EU though, is that they don't have a Federal Reserve and it is more difficult to co-ordinate fiscal policy.